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    Chipgate Highlights Problem in Casino-Poker Player Relationship

    Posted by Coffee January 29, 2014

    On January 18, 2014, New Jersey state casino regulators canceled the first event of the Borgata Winter Open. This action came one day after suspicions arose regarding fake chips within the tournament itself. At the time of the cancellation, 27 players remained in the tournament.

    Since that time, authorities have announced the arrest of a man named Chris Lusardi in connection with a bizarre discovery of several counterfeit chips lodged in the pipe of his hotel room’s toilet. Although Mr. Lusardi is certainly due his day in court, a search of New Jersey’s public crime website reveals two other convictions Mr. Lusardi has received for fraud and forgery. Speculation abounds that Mr. Lusardi did not act alone in this particular endeavor.

    However, what has struck me is that this unfortunate incident can partially be blamed on Borgata’s lax enforcement of security around the operation of its tournaments. Far from being a standard weekly tournament with a couple of tables, this event was a large-scale game with millions of dollars at stake, yet a fraudster was able to compromise it and generate a state commission investigation with little difficulty. Borgata and the state commission are now tasked with determining a fair method of refunding the prize pool – but no matter what they decide, someone will be unhappy with the result.

    The final remission is not my concern. The attitude that allowed it to happen is.

    Casinos have long taken a hands-off approach to disputes regarding money and chips in their houses. Incidents such as players refusing to pay their pots, chips being stolen off the table when a player is absent and the trainwreck that occurs when a new player plays over another. The response from casinos has always been a variant of caveat emptor. The only problem with this approach is that the casino themselves are no longer the seller when it comes to poker; they are the service provider.

    As such, they should have an obligation to ensure the fairest proceedings possible, including higher security for chips and cash transactions. It is not unreasonable to expect that they, as the gamerunner, have a responsibility to protect our investments, which can range into the millions. They are essentially acting as escrows for our money, taking a percentage as compensation for their services.  For their part, Borgata was set to make $288,840 simply for running this particular tournament, more than all but a few of the top finishers.

    There is a legal concept for these kinds of obligations. It is known as a fiduciary duty. While I am stopping short of suggesting that casinos should retain a surety bond for all of their poker operations. However, despite what I know would be a deleterious effect on the number of poker tournaments available, I think that it would make sense to require such a bond for tournaments, or at least, for some of the bigger tournaments. There is simply too much on the line for us, and meeting our dismay about being left holding the bag with a shrug is a pretty inadequate response – one that we can literally not afford to stand for any longer.

    Comments are closed.

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